Ohio Enacts “Right to Cure” for Consumer Lawsuits Against Contractors, Lenders, and Manufacturers

May 22, 2012 | from AdminBerenson No Comments

Last month Ohio Governor John Kasich signed House Bill 275 into law, which allows Ohio businesses to offer to “cure” a complaint brought by a consumer under the Ohio Consumer Sales Practices Act (“CSPA”). The CSPA, like most broadly worded consumer protection statutes, generally prohibits a business from engaging in “deceptive” or “misleading” practices with a consumer. Violations of the CSPA allow the injured consumer to rescind the transaction or recover actual economic damages, non-economic damages in an amount not exceeding $5,000, declaratory and injunctive relief, treble damages, and reasonable attorney’s fees.

Under HB 275, a business can now make a “cure offer” to the consumer by sending the consumer by certified mail an offer to cure the problem within the first 30 days after being served with the lawsuit. The statute provides a model form that should be followed and the business must copy the court on the cure offer. The consumer then has 30 days to respond to the cure offer, and copy the court on their response, or the offer is considered rejected.

If the cure offer is rejected and the consumer continues with the lawsuit and wins but receives an award of actual damages that is less than what was offered in the cure offer, then the consumer will not be eligible to receive treble damages, court costs, or his attorney’s fees incurred after the rejection of the cure offer.

We expect HB 275 will become law on or about July 2, 2012, and will be a welcome option to businesses looking for a cost-effective early exist from needless consumer litigation and class actions under Ohio law.